Can buy a flat at 4th floor,which is under gram panchayat

In a municipality the rules for approval of the apartments will be different from ground + 2 and ground+3. If you want ground + 3 you should have a lift and other norms. But for ground + 2 there is no necessity of lift.

I was a victim in one such case long back. I Paid Rs.50,000/- to a builder for an apartment. My flat is supposed to be in the first floor. But due to some problems the builder couldn't complete the construction. But he has not given the money back to me. But he registered a flat in another apartment in the fourth floor. Without seeing the approval I have accepted for the same. Only 3 floors were constructed and he told me that he will construct 4th floor and he registered the undivided share. But he never constructed. Then I went to municipality asked them that I will get the construction made on my own. Then they have taken the approved plan and told me that there is no permission and I can't do it. My money is wasted.

So before you purchase get the confirmation from the municipality and get a copy of the approval. Then only you can purchase. Otherwise you may land in troubles.

As the building and area is now under the municipality, the rules and approvals of municipality will be applicable. If you want to buy such a property at G+3 level then the OC obtained by the builder will be required in addition to all other property documents. If builder has permission letters only from the Gram Panchayat then you should not go for such property. You ask the seller or builder to get these documents beforehand and then only think of going for this transaction. You can enquire in the municipality office as what will be the penalty and other things in regularisation of such flats under the existing real estate procedure. If that is a reasonable amount then negotiate with the seller or builder as how to share it among them and you. Please note that property is such a thing that if the documents are not in order the buyer will have many problems in the future.

Since the building to be purchased is in the municipality area, you will have to check the entire papers under the possession of owner such as his income tax returns for the last five years, approval status for G +3 level, papers related to electricity connection and Sewarage system etc.
Though the Builder may have good rapport in his area, but you need to have thorough verification of his credentials through the verification of the related papers.
You may further negotiate with the officials of the municipality regarding the essential criterias for the approval of flats and see if such factors are being complied with in the construction of flats by the owner.
Such a cautious approach will avoid any embarrassing situation in due future.